This paper investigates the meaning of the neo-Confucian concept of 'li'. From early on, it has the sense of a pattern designating how things are and ought to be. But it takes on the appearance of something transcendent to the world only at a certain point in history, when it becomes juxtaposed to 'qi'. Zhu Xi has been criticized for this 'li-qi' dichotomization and the transcendentalization of 'li'. The paper re-examines this putative dualism and transcendentalism, looking into both Zhu's discussions and pre- and post-Zhu discussions of 'li', and concludes it to be an inter-connective threading immanent to the world.